Replies to post #5378 on The Rising Influence of Rising Affluence

[zipjet]

I do not read this board and thus may really be missing the point - nor do I have time to do so.

I responded because of a link on the biotech board by DD.

Steel was used as an example of a general proposition that I think applicable to China, namely that: The GDP of China is substantially raised by extraordinary capital spending that is unsustainable.

I did not call China-steel or China generally a "bubble". I subscribe to the view that a "bubble" is only known when it pops. Until then we can note the excess, but bubbles can deflate slowly or be absorbed in general growth. If they don't pop - we do not know them to be bubbles.

Raw materials certainly will benefit from growing populations and more affluent populations. (Suspect that is the basis of this board.)

ij

[DewDiligence]

More on the long-lived tailwind for iron ore (from BHP’s CEO):

http://blogs.wsj.com/dealjournalaustralia/2012/07/11/bhp-eyes-its-australian-options

BHP Chief Executive, Marius Kloppers told a U.S. mining conference in May that there was a window of opportunity for existing producers of iron ore to invest in production to meet the expected continued rise in Chinese steel demand through 2025, after which demand is expected to peak and the industry will have greater supplies of scrap steel.